CHARLESTON, W.Va. -- Patriot Coal Corp. on Thursday asked a U.S. bankruptcy judge to throw out the terms of the company's contract with the United Mine Workers union and modify the health-care plan covering thousands of retired miners.
Lawyers for Patriot Coal did not publicly disclose the exact terms of the proposal, but indicated in a news release that the company wants to cut wages, reduce benefits and adjust work rules for its unionized employees "to a level consistent with the regional labor market."
UMW President Cecil Roberts said the company's proposals are "totally unacceptable, unnecessary and put thousands of retired coal miners, their dependents or their widows, on the path to financial ruin, worsening health conditions or even death."
"This is the path we have been saying Patriot would take from the very beginning of this bankruptcy last July," Roberts said. "They're demanding massive changes to the collective-bargaining agreement, and they want to scrap the health-care benefits our retirees earned through decades of blood and toil."
St. Louis-based Patriot has filed for bankruptcy protection while it tries to reorganize its finances and operations, including "unsustainable labor-related legacy liabilities," such as retiree health-care liabilities of $1.6 billion.
"Our labor and retiree benefits costs have risen to levels that simply cannot be sustained, given the challenges facing the company and our industry," said Patriot President and CEO Ben Hatfield. "All of our employees and retirees are being asked to make sacrifices to help Patriot emerge from bankruptcy. These sacrifices include reductions in compensation and benefits for salaried, union and nonunion employees."
Neither Patriot nor the UMW revealed complete specifics of the company's proposals, and Patriot lawyers asked Judge Kathy A. Surratt-States in a separate court document to allow that information to be filed under seal.
In a motion filed Thursday evening, Patriot lawyer Elliott Moskowitz said the company's proposals "contain certain highly confidential and sensitive information." Disclosure of the information "would cause significant harm to the debtors' commercial relationships and competitive position," the lawyers said.
Phil Smith, a spokesman for the UMW, questioned why Patriot doesn't want the public to see the full details of its proposals.
"We're curious what it is they want to hide," Smith said. "Their proposals are what they are. It's going to come out sooner or later."
UMW lawyers previously disclosed in a separate court case that Patriot wants to set up a separate trust, called a voluntary employee beneficiary association, or VEBA, to fund health-care benefits for retirees. However, the union says, that Patriot proposal would provide funding equal to a fraction of the UMW health plan's current costs.
The union says it has been unable to provide complete details to the public, though, because Patriot's proposals were provided to UMW officials during confidential contract negotiations.
A hearing was set for April 10-11 on Patriot's contract and health-care benefit proposals.
"The approval of this motion will be the single most important action necessary to ensure Patriot's financial viability and successful reorganization," Hatfield said.